Google Unveils New Nexus 7 Tablet

Hugo Barra, vice president Android product management at Google, displays the new Nexus 7 tablet on Wednesday, July 24, 2013, in San Francisco.

By Amir Efrati and Greg Bensinger

Google unveiled a new version of its Nexus 7 tablet Wednesday, boasting features like virtual surround sound and a faster processor, as it looks to boost Android’s lead over Apple’s iPad in terms of market share.

Google showed off the new device, designed in partnership with Asustek Computer, at an event in San Francisco. It is powered by an updated version of Android, which also is the No. 1 software for smartphones.

The Mountain View, Calif., company is working to fend off Apple, as well as Amazon.com 's Kindle Fire tablets. Sundar Pichai, senior vice president of Android and Chrome, said Android tablets now account for nearly half of all such tablet computers sold worldwide.

“By the end of 2013, consumers are going to buy more tablets each year than personal computers,” said Pichai.

The new tablet, which goes on sale at Best BuyWal-Mart and other retailers July 30, costs $229 with 16 gigabytes of storage and $269 for 32 gigabytes, according to Google and the Best Buy website. That compares to $329 for the 16-gigabyte iPad mini, an 8-inch tablet, and $429 for the 32-gigabyte version.

The device will soon be available in major markets in Europe and Asia, Google said.

The new Nexus device has parental controls so an owner can restrict the type of apps their children can access, as well as 3D graphics and video compression capabilities that would appeal to videogame app developers, said Android executive Hugo Barra, at the event.

Google also unveiled a device called Chromecast to help people connect their TVs to their mobile devices so that they can view Web content in their living rooms. The two-inch device, which looks like a thumb drive and is based on Google’s other operating system, ChromeOS, plugs directly into a television to help “unify your experiences across all your screens,” said Pichai.

The Chromecast device echoes similar technology from Apple called Airplay and from Microsoft called Smartglass.

Google’s support for the Nexus tablet serves several purposes, including the need to compete with Amazon’s $159 Kindle Fire tablet, a formidable threat to Google. Unlike the majority of Android devices, Amazon’s tablet uses a separate version of Android that doesn’t come with Google services pre-installed. (Android is a free, open-sourced software, so it is available to anyone.)

Google is currently at work on a major update of Android software that is expected to be unveiled sometime later this year. Nearly a billion Android devices have been activated since 2008, the company has said, allowing Google to ensure that its revenue-generating services such as Google Search have a guaranteed spot on people’s mobile devices.

The Nexus 7 has a high-definition display that is more advanced than that of the iPad, but its 1.5GHz Qualcomm Snap dragon S4 Pro quad-core processor is less advanced than some Android enthusiasts had expected.

The Nexus 7 became the most successful device in the history of the Nexus program—at one point selling at a rate of about one million devices per month—after being launched last year. Typically, Nexus devices cater to hardcore fans of Android and are designed to show hardware makers what they can do with the Android operating system, but aren’t meant to be big sellers.

Still, Asus-made tablets were a distant No. 4 behind Apple, Samsung Electronics and Amazon in terms of shipments during the critical fourth quarter of last year, according to research firm IDC.

The Nexus 7 succeeded in part because it was the most advanced Android-powered tablet on the market at the time and thanks to its low $199 price tag and significant marketing push by Google, which some analysts believe subsidized the device so that it cost the same as Amazon’s Kindle Fire tablet at the time.

Amazon has yet to release the next version of the Kindle Fire, which is expected to be available before the fourth-quarter shopping season.

Unlike Apple, which generates hefty profit from the sale of hardware, Google and Amazon play a different game. Google, which does get an undisclosed cut of Nexus 7 sales, simply wants as many Android-powered devices in the market because they are preloaded with revenue-generating services such as YouTube, Google Search and Google Maps. Amazon’s bet is that customers will use its tablet to shop for products and digital media that is sold by Amazon.

For Google, increased sales of Android tablets can help its financial results in the short term, as prices for online ads viewed on tablets are higher than for ads viewed on smartphones and nearly in line with ads viewed on PCs. The rise of smartphones has weighed on Google’s revenue growth in recent quarters.